P6-17 (Appendix) Activity-Based Management [LO 6] Primary Savings and Loan of De
ID: 2354360 • Letter: P
Question
P6-17(Appendix) Activity-Based Management [LO 6]
Primary Savings and Loan of Denver is conducting an ABM study of its teller operations. In this regard, the company has identified the following major activities performed by bank tellers:
Process deposits
Process withdrawals
Process requests for certificates of deposit
Answer customer questions related to balances, overdrafts, interest rates, etc.
Print out customer activity statements
Provide access to safe deposit boxes
Reconcile cash drawer
The company benchmarked its operations against banks in other cities and has found that it has many more tellers in comparison to banks of similar size. Further, the company has a relatively unsophisticated Web site and call center.
a. How do the company's Web site and call center affect the demand for teller activities and the cost of teller services?
b. Identify two or three ways that technology can be used to reduce the cost of teller services.
Explanation / Answer
a & b.) A fully endowed web site alone can provide basic services such as accessing one's finances, viewing past transactions, late fees, CDs and reconciliations. A better equipped call center could more easily handle customer questions. Thus, you can limit physical teller duties to merely processing deposits/withdrawls and providing access to safe deposit boxes. These routinized tasks can minimize to time each client requires for their business allowing you to lay off some workers while maintaining full effectiveness and higher productivity.
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